Car Dealers Sue to Stop Tesla From Selling in Missouri

The Show-Me State is the latest battleground in car dealerships' ongoing war to thwart Tesla Motors.

The Missouri auto dealer cartel is on the move, trying to prevent citizens of that state from being able to buy aModel S sedan or (when it finally shows up) a Model X crossover. Automotive News reports that the Missouri Automobile Dealers Association filed a suit late last week accusing the state's Department of Revenue of violating Missouri law by allowing Tesla to sell its cars directly to customers. Shots fired!

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The Missouri dealer group claims that, by granting Tesla Motors a license to sell vehicles at its University City location, the Department of Revenue violated state statute. The suit seeks to revoke the license given to that Tesla store (so far, the state's only Tesla sales facility) and prevent any further licenses from being granted to the electric carmaker. The revenue department has stated that it does not comment on pending litigation.

It's not the first battle against Tesla the state has seen: Automotive News reported in May of 2014 that an anti-Tesla addendum to a bill regarding all-terrain vehicles was struck down.

In defense of its stomping and yelling, the Missouri Automobile Dealers Association said, basically, things are the way they are now because that's the way they've always been. From the lawsuit:

"For many years, new motor vehicles have been sold in Missouri using a tried-and-true structure: manufacturers do not sell cars themselves, but do so through a network of licensed dealers. This structure of separate roles for manufacturers and dealers is established by statute and reflects wise public policy."

The electric carmaker, naturally, sees things differently. "Missouri law is very straightforward in that it prohibits manufacturers that use independent franchisees from competing directly against them," Diarmuid O'Connell, Tesla's vice president of corporate and business development, said in a statement. "This has nothing to do with Tesla, which has never used independent franchisees."

If the state dealer cartel's action is successful, it will put Missouri in the company of Arizona, New Jersey, Texas, and Michigan, the last of which passed a similarly crony-powered bill that was backed by that scrappy young startup, General Motors, and won those states top billing on the Information Technology & Innovation Foundation's prestigious Luddite Awards.

In case you haven't inferred our stance by this point, here it is: The crony capitalism that enables dealership syndicates to strong-arm protectionist legislation into a state's law books is self-serving corruption that hurts consumers and hinders the market. If carmakers want to compete with Tesla, they should do it by making desirable vehicles that people want to buy. And if dealers are afraid that a new sales model will steal their lunch, they should seek to change their tactics, not their state laws.

At least as far as we can tell, that's how the market is supposed to work in the first place.